Cozelle, Inc., purchased inventory costing $125,000 and sold 80% of the goods for $200,000. All purchases and sales were on account. Cozelle later collected 25% of the accounts receivable. Assume that sales returns are nonexistent.
1. Journalize these transactions for Cozelle, which uses the perpetual inventory system.
2. For these transactions, show what Cozelle will report for inventory, revenues, and expenses on its financial statements at the end of the month. Report gross profit on the appropriate statement.